Report of the Committee to propose specific actions to be taken in relation to Virtual Currencies


The report suggested that digital tokens can be grouped into two categories depending on the objective of their issue.

  • Utility tokens: “They entitle future access to a company’s product or service. They can be understood as digital coupons for the service the company is developing. For example, tokens issued by a hotel service provider in exchange for deposits or investments.”
  • Security tokens: The report noted that some token issuance has the attributes of a security, referring to the U.S. SEC vs. Howey court case which established the guidelines for determining if “a financial arrangement involved an investment contract and was subject to securities regulations”. As per this ruling, a token would classify as a security when:
    • There was an investment of money
    • There was an expectation of profits
    • The investment of money was in a common enterprise
    • Any profit came from the efforts of a promoter or third party

Document Details

Authoring Country: 
Year of Document: 
Date of Document: 
Thursday, February 28, 2019
Document Authors: 
Department of Economic Affairs, Ministry of Finance

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